RCBC okays Cathay Life’s P17.9B stake in bank

The board of the Yuchengco-led Rizal Commercial Banking Corp. (RCBC) on Wednesday approved Cathay Life Insurance Co. Ltd.’s bid to acquire a 20 percent stake in the bank in line with RCBC’s fundraising for its core equity tier 1 capital for the year.

In a disclosure to the Philippine Stock Exchange (PSE), RCBC said its board of directors approved and ratified Cathay Life’s 20 percent stake acquisition, priced at P64 per share, amounting to a total of P17.9 billion.

Under the transaction, Taiwan-based Cathay Life will acquire 124.24 million RCBC shares valued at P7.95 billion. It will also subscribe to 155.75 million RCBC shares held by Hexagon Investments B.V. and International Finance Corp. valued at P9.95 billion via respective sale agreements.

Cathay Life is a wholly owned subsidiary of Taiwan-based Cathay Financial Holdings Co. Ltd., a leading financial products and services provider in Taiwan for over 50 years.

RCBC recorded a P3 billion net income in the first nine months of 2014, down from the previous year’s P4.7 billion on a lack of industry-wide trading gains.

Formerly Rizal Development Bank, RCBC was incorporated in 1960 and is now under the Yuchengco Group. RCBC Capital and RCBC Securities are wholly owned subsidiaries of RCBC. As of last year, RCBC and its subsidiaries had 1,150 ATMs and 435 branch networks nationwide, inclusive of 27 extension offices.